ABC classification

ABC classification is a method of dividing stock by value in order to decide how often it has to be counted. Items of high value that must be closely controlled form the A group, middle-value items are B and low value items are C. For example if a company stocks laptop computers, memory sticks and blank CDs, the computers would be classified A, the memory sticks B and the CDs C. In Openbravo ERP ABC classification is used only to determine how often the physical inventory count occurs.

Amortization

Amortization is a method of accounting for the purchase of large assets so that the full amount is not recorded in a single period, thus distorting profit and loss figures and other accounting information. For example, the purchase of a 10,000 euro delivery truck could be amortized at 1000 euros a year for 10 years.

Asset

An asset is anything of value owned by a company. Assets can be physical items such as computer equipment or factory machinery, goods and materials held as inventory, or vehicles. Assets can also be intangible, such as intellectual property.

Bill of materials (BOM)

A bill of materials product is a product which you manufacture or assemble out of a number of other products. For example, a bicycle manufacturer could hold the frame, the wheels and the seat in stock.
Items that form part of a BOM product do not all have to be manufactured in-house, nor do they all have to be bought from external suppliers. For example, a computer company may make and assemble the computer itself, but buy keyboards and mice from a different suppliers and assemble the whole thing for the marketplace.

Bin

The bin location is the precise location of goods within a warehouse. When you receive a delivery, you must specify where the goods are going to be placed so that they can be found again. The bin location consists of three co-ordinates, the aisle, the rack and the bin itself.

Business Intelligence

In Openbravo ERP, Business Intelligence is the process of monitoring the progress and activity of the company in terms of sales activity, movement and value of stock and productivity of manufacturing process.

Business Partner

A business partner is anyone who does business with, or within, your organisation. If you are purchasing goods, the supplier is a business partner. If you are selling goods, the vendor is also a business partner. Internally, an employee who puts in an expense claim is a business partner. So, the term business partner has several meanings depending on the context.

Cash Accounting

Cash accounting is a method of bookkeeping in which only cash receipts and payments are recorded as they occur. Goods or services bought or sold on credit are not recorded as transactions until payment is made.

Cash Book

An accounting book which documents both cash receipts and disbursements.

Client

The client, also known as the entity, represents the highest level of organization within your enterprise, usually a company. In Openbravo ERP, one client cannot share data with another client. However if a single Openbravo system has more than one client, both clients will share the same configuration of windows, tabs and fields because these are defined at system level.

Small enterprises may only require a single client. Larger enterprises may require several different clients sharing the same overall Openbravo System. Where an enterprise requires multiple clients that are independent in system configuration, it requires multiple instances of Openbravo ERP so that each Application Dictionary can be configured separately.

Chart of Accounts

The chart of accounts lists the accounts to use by your organization while posting transactions to the ledger. The chart of accounts is defined as an account tree and it is a mandatory dimension of the organization's general ledger.

Document

In Openbravo ERP a document represents the forms and paperwork involved in business processes.

For example a document can be:

A purchase order

A purchase invoice

A sales order

An expenses sheet

Document Type

Fast moving / Slow moving

Fast moving goods are items which are sold frequently and have a high turnover in the warehouse. The speed with which items come into and leave the warehouse influence their storage - for example you may want to stock fast moving goods in the bins which are easiest for warehouse personnel to access.

IBAN code

IBAN stands for International Bank Account Number. It is is an international standard for identifying bank accounts regardless of their country of origin.

Just in time ordering

Just in time ordering is a manufacturing methodology whereby the minimum materials are held as stock, and items are ordered just in time to fulfill production or sales deadlines. This prevents company assets being tied up in stock unnecessarily.

Material Requirement Planning (MRP)

Material Requirement Planning is the process of making sure that the manufacturing or assembly process is well equipped enough to fulfill sales, without investing too much in stock or holding stock for too long.

Organization

An organization is a subdivision of the client, which you can use to model the structure of your enterprise in Openbravo ERP. Organizations form a tree structure, with organizations on the same branch able to share data with each other, but not with organizations on different branches. You can use organizations to reflect regional divisions within your enterprise, for example company branches in Madrid and Barcelona, or functional divisions, for example Production and Marketing. Organizations can have different general ledgers and business calendars.

Organization Type

The Organization Type of an organization affects how an organization behaves in terms of accounting, its business calendar and its relationship with other organizations in the organization tree. There are three default organization types:

Organization: usually used only for the * superorganization created during the initial client setup process.

Legal Entity: an organization which is a recognized legal corporation.

Generic: any other organization.

For most enterprises, the three default organization types are sufficient. However, you can configure new organization types to suit your specific business needs.

Period

In accountancy, the fiscal year is divided into periods for administrative and tax purposes. For example where taxes are paid quarterly, you could define four periods of the year coinciding with each quarter.

Physical Inventory

The physical inventory is the amount of physical stock held in your warehouses. Although you can use an ERP to keep track of how much stock you have in inventory, it's important to verify this from time to time. Over time, items may get lost, or damaged so that discrepancies occur between the levels of stock on the system and the levels of actual stock in the warehouse.

In Openbravo ERP, you can use the Physical Inventory function to reconcile the two stock levels.

Price List

A price list records the price of individual goods for sale to customers. You can create different price lists for different purposes (for example for different markets), but you can also create different versions of the same price list (for example for to give specific prices for particular customer groups).

Price List Schema

A price list schema acts as a template for price lists. Applying a price list schema to a price list enables you to price specific products, or groups of products, with specific prices for specific periods of time (for example, 20% off all christmas decorations during december).

Procurement

Procurement is the process of acquiring goods from a supplier. Use the Procurement process to create a purchase order, receive the goods into your warehouse and pay the supplier.

Receiving

Receiving goods is the physical process of putting goods that a supplier has delivered in your warehouse. Use the receiving process to update stock levels on the system, and identify the location of the goods so that when you need them you can find them again.

Purchase order

A purchase order is a request to a supplier to supply you with goods. When you complete a purchase order, you update the system to notify the warehouse that the goods are expected, and also notify the accounting system that an invoice will need to be paid.

Rebate

A rebate is an amount paid by way of reduction, return, or refund on what has already been paid or contributed

Requisition

A requisition is a way of notifying the buyer that they need to raise a purchase order. This could be a request to buy more stock or materials, or it could be a request for capital expenditure such as a new office computer. Requisitions are useful because if there are multiple requisitions for the same product, the purchasing department can create a single purchase order and benefit from volume discounts from the supplier.

Standard cost

Standard cost is the usual price that a vendor charges a customer for a particular item. The other types of price are:

List price: the publicly advertised price.

Price limit: the lowest possible price that a vendor can charge for a particular item.

When you are creating a pricing structure for your products, you can apply discounts to all of these prices.

Storage Bin

A storage bin is a location within a warehouse where the material is stocked.
The position of a storage bin is identified by three coordinates:

Row (X)

Stack (Y)

Level (Z)

Volume discounts

Volume discounts are discounts that are applied when a customer buys a certain quantity of goods from a supplier. For example 5% off when you buy 100 items or more.

Warehouse

A warehouse is the place where your stock and materials are stored, ready for production or to be sold to customers. In Openbravo ERP, delivery trucks are also treated as mobile warehouses so that you can track the movement of stock.

Withholding tax

A withholding tax is tax on a sum of money that is payed to the government at source by the payer of that sum of money, rather than by the eventual payee. For example, an employer may withhold a portion of an employee's salary and pay it to the goverment on the employee's behalf as income tax.